Park Lawn Company Limited Announces Agreement with Park Lawn Corporation on Repayment of Promissory Note
Jul 29, 2016, 18:08 ET
TORONTO, July 29, 2016 /CNW/ - Park Lawn Company Limited (CSE:PRL) ("The Company") today announced it has reached agreement with Park Lawn Corporation ("PLC") for the repayment of the Promissory Note ("the Note") by PLC to the Company.
On July 28, 2016, the Company entered into an agreement with PLC that provides the basis for repayment of the Note. The Note has a current par value of $5,096,498 and is scheduled to be subject to an interest rate reset on September 16, 2016. It is at the option of PLC to renew for a fixed rate for an additional 10 year term. It is expected that the interest reset rate would be approximately 2.35% per year.
PLC has recently entered into a new debt financing arrangement. The bank providing the debt financing is requiring the Company enter into an inter creditor agreement which would postpone the Note to the new bank financing.
PLC and the Company concluded this would be an appropriate time to pay down the Note on acceptable terms to the parties. Under the agreement reached between PLC and the Company the value of the Note was determined using a discount rate of 4.25%. PLC has agreed to make an immediate cash payment of $1 million. The balance is to be paid in the form of shares of PLC which will be issued from PLC treasury. The Company had the option to exercise its right to take the shares up to the date of September 16th, 2016. The Company has given notice to PLC that it will take the payment of shares as soon as possible. The price of the shares to be issued is to be discounted to the extent the current price is higher than the 20 day volume weighted average price (the "VWAP"), and the shares issued from PLC treasury will be discounted an additional 8% from the 20 day VWAP. From the time of issuance of the shares, the Company will be required to hold the shares for a six month period. The final amount to be paid to the Company will not be determined until September 16th, 2016. The Company estimates that the value of the transaction in cash and shares will be in the range of $4.4 to $4.9 million. The final value of the arrangement will not be known until the Company sells the shares.
About Park Lawn
In addition to its continued involvement in the development of the 57 Linelle Street site, the Company holds a vendor take back mortgage from Mattamy of $4,920,000, and a house at 53 Linelle St. The house is currently under contract for sale with the sale to be completed in August 2016.
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Park Lawn Company Limited
For further information: Frank Mills, President, Park Lawn Company Limited, Tel: (647) 933-9079, Fax: (416) 512-6076
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